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ANALYSIS » Democratic trend in luxury fashion shuts down second lines

Democratic trend in luxury fashion shuts down second lines

Apr 16, 2011

Just Cavalli, Rome boutique

Last month, Italian luxury fashion house of Dolce Gabbana announced the closure of its second line D&G which it had taken over to manage and operate directly from licensee Ittierre Group, the troubled manufacturer which has been undergoing banruptcy proceedures. However, Dolce Gabbana made the decision to take over their second line well before the debut of the crisis and before the troubles at Ittierre. The philosophy of the duo was to improve the quality of the D&G collections and diverify product lines, while retail would be in mono-brand D&G stores, most of them in franchising internationally.

Then, there care Dolce Gabbana’s second least inspired decision and that was to buy out several leather manufacturing ateliers North of Milan with the aim of controlling the entire production process. The decision is now regarded as having had a very negative impact on the financials of the business long term.

There were also attempts to integrate the D&G line in the main Dolce Gabbana stores, but with every such step, things became more and more clear that Dolce Gabbana could only emerge successful from the crisis if it completely repositions the brand to the top luxury level. Quality of manufacturing and quality of materials is crucial nowadays, consumers paying much more attention than they used to.

The house of Versace also decided early last year to terminate its Versace Jeans Couture line which was produced and distributed in licensing by Ittierre. Instead, Versace’s former second line, Versus has been successfully revived thanks to sensible creative direction of a designer, other than Donatella Versace. Could this be a solution for Dolce Gabbana ? Definitely, yes. It would not only bring a fresh new spirit but it would also make a powerful statement that a brand is no longer just about the founding designer(s).

Armani Group has also made similar moves in 2010, taking over from a licensee its Armani Exchange line, the most affordable Armani line, which is now rolling out a major international expansion especially in Asia, Europe and the Middle East. Then, there is the next level line, Armani Jeans which is no longer distributed within Emporio stores and multi-brand shops, but also has its own mono-brand boutiques, the first concept was introduced last year in Milan and will roll out internationally.

Then, the next higher level line is Emporio Armani, which is also the biggest line within the entire group, with the largest number of stores worldwide, most in franchising. In the past 5 years, Emporio Armani saw closures in Brazil, Bulgaria and China and its success is very much depending on the local franchise partner. Then, there are also the challenges posed by the high pricing of some Emporio Armani products, especially apparel, most made in Asia. The first line of the group remains Giorgio Armani with fewer, selec operations in major capital cities.

Unless Armani regroups some of its lines under a single umbrella, similar to the Burberry retail concept, the future does not necessarily translate into success. The advantage would be that the first line, which is entirely made in Italy can vouch for the other lines, providing the aspirational clout.

Other major international luxury fashion brands such as Donna Karan and Missoni have been considering integrating their second lines into the main stores, a decision which could prove to be most inspired in the long term.

The ongoing international crisis will undoubtedly force many brand to take clear decisions regarding second or third lines. Labels can no longer be democratic and top luxury at the same time !